It’s a special type of policy called a Business Owner’s Policy (BOP) designed specifically for restaurant owners. A BOP combines General Liability Insurance and Commercial Property Insurance, giving you comprehensive protection tailored to your restaurant’s daily operations.

Whether you own a small café, a food truck, or a full-service restaurant, this bundled coverage helps safeguard against lawsuits, property damage, fire, theft, and more. Many restaurant owners choose a BOP for its affordability and simplicity, while also meeting landlord and vendor requirements.

Property Insurance

Restaurant property insurance helps protect your business from financial losses caused by fire, theft, vandalism, or other covered perils. If a covered event damages your premises, this insurance can cover the cost of repairs or replacements, minimizing downtime and helping you get back to business faster.

If you rent your restaurant space, it’s essential to review your lease agreement with the landlord to understand who is responsible for commercial property insurance. Regardless, any investments you’ve made in the interior, like custom kitchens, flooring, or fixtures, should be protected. That’s where a Tenant Improvements and Betterments policy comes in, covering the upgrades and enhancements you’ve paid for in the rented space.

Personal Property Coverage

Insuring your personal property will help to rebuild your business in case of loss. It will cover you for what’s inside your restaurant in case of peril. In other words, you will have coverage for your tables, chairs, kitchen equipment, etc.

To ensure proper coverage, keep a detailed inventory of your restaurant’s assets. Take clear photos, save receipts when possible, and estimate the replacement value of your items. This documentation will streamline the claims process and help ensure you’re adequately reimbursed.

Personal Property Insurance Includes:

General Liability Coverage

This applies to third parties within your premises, such as customers. They are liable for compensation if they get hurt or get food poisoning while in your restaurant.

General Liability Insurance is a must-have to protect yourself from this financial cost of Liability insurance will take care of your defense and settlement expenses.

Commercial Auto Insurance

If your restaurant uses a vehicle for food deliveries, catering, or supply pickups, a commercial auto insurance policy is crucial. Personal auto coverage won’t protect you in case of an accident during business operations, leaving your business exposed to liability and repair costs.

Commercial auto insurance helps cover vehicle damage, medical expenses, and third-party claims resulting from work-related driving. Whether you own one car or an entire fleet, this policy ensures you’re legally compliant and financially protected on the road.

Liquor liability Insurance

Most restaurants serve alcohol separately. If you serve alcohol at your establishment, you need liquor insurance coverage in addition to your beer or liquor license.

So, if you are selling alcohol at your establishment, you will need this coverage to protect against the actions or eventualities caused by intoxicated people on your premises. This policy will be based on your gross liquor sales and the coverage limits you need.

Food Contamination Insurance or Spoilage Coverage

Since restaurants buy food in bulk, they rely heavily on refrigerators and freezers to keep the food fresh. Power loss for long hours may cause these foods to go bad or cause losses. Food contamination insurance compensates the owner in the event of such a scenario, eliminating that genre of loss as a part of the restaurant’s financial vulnerability.

Food spoilage is crucial coverage for when your food goes bad, which could be a considerable expense depending on the type of food you serve. Imagine 50 steaks going bad; that is a horrible day as a restaurant owner.

Workers’ Compensation Insurance

A chef has a constant risk of burn injuries, and servers are prone to falls. Because their safety is essential, you must provide Workers’ Compensation Insurance to cover medical expenses for any work-related injuries.

Without workers’ compensation insurance, even a minor injury can lead to costly out-of-pocket expenses and legal trouble for your business. Most states require this coverage for restaurants with employees—whether full-time, part-time, or seasonal. It not only protects your team but also shields your restaurant from potential lawsuits related to workplace accidents.

Power Outage Coverage

Since restaurants buy food in bulk, they rely heavily on refrigerators and freezers to keep the food fresh. As power loss for long hours may cause these foods to go bad or cause losses, you must ensure that you can replace the products to continue with your business.

For example, if you have fish or raw meat products in your fridge, keeping the cold chain for each product is essential for safe consumption. Therefore, the policy must protect you when you lose power in your power box or from the power station because both can significantly impact your operations. 

Theft Coverage

Now, nobody likes to think about the idea of having a dishonest person working for you, but unfortunately, it happens. No one is exempt from suffering a theft. That’s why we advise you not to disregard this coverage to protect your investment and, in the worst-case scenario, be able to recover what you lost due to a dishonest person.

Employee theft coverage is essential to have, along with Employment Practices Liability Insurance. This last coverage is for hiring and firing employees and covers sexual harassment.

Business Interruption Insurance, also known as business income insurance

Business Interruption Insurance is a type of insurance covering the loss of income a business suffers after a disaster. These amounts can be significantly larger than the initial claim itself. Take, for instance, a small kitchen fire that damages a small portion of your kitchen. The damage claim may only be $50,000, but your restaurant may be closed for months due to clean-up and repairs.

The income loss coverage may be due to the disaster-related closing of the business facility or the rebuilding process after it. It differs from property insurance because it not only covers the physical damage to the business but the additional coverage for the profits that would have been earned.

Bailees’ Liability(optional)
If you have a coat check-in, you can imagine giving the wrong mink coat to a customer could be a very costly mistake. Bailees Liability is specific coverage for such a case and any other that involves damage to the customer’s property while under the care of a bailee.